Heritage Financial (HFWA) Stock Forecast & Price Target

Heritage Financial Corp is poised for growth, as indicated by the upward revision of its 2026 earnings per share (EPS) estimate from $2.32 to $2.50, reflecting a 16% year-over-year increase from the prior estimate of $2.15. The anticipated closure of the Olympic transaction is expected to yield positive net benefits, thereby increasing the target valuation from $28 to $29, set at 11.6 times the updated 2026 EPS estimate. Additionally, the conference call underscored a positive outlook, emphasizing strong cultural synergy and credit alignment between the companies, along with a strategic opportunity for management to effectively redeploy liquidity to foster growth.

Heritage Financial Corp is facing significant risks due to deteriorating economic conditions in the Pacific Northwest, highlighted by concerns over home price depreciation and worsening employment scenarios. Additionally, the company has experienced severe credit quality deterioration, which poses a threat to its financial stability and performance. Compounding these challenges, the pandemic has hindered Heritage's previously active mergers and acquisitions strategy, particularly as aggressive credit union buyers have emerged in the market.